Legal Ownership Structures, Strategic Planning and Stakeholders (copy)

Sole trader

A business that is not a seperate entity from the owner.Therefore, the owner uses their personal tax file number and all debts fall on to the owner. It is cheap and easy to establish with minimum government regulation but the business condition equals to the owners condition and the owner has unlimited liability.

Partnership

A business by 2~20 people. Although it is not a seperate legal entity and the owners are responsible for the debts of the business, a seperate tax file number is needed. And in case the annual income turnover is over the nominated threshold,the business must register for goods and services tax.

Private Company

A seperate legal entity from the owner. They have private ownership with the proprietorship is restricted to 50 owners. Shareholders may sell their share with approval of other shareholders. Must have Pty Ltd(Proprietary Limited) after the business name.

Public Company

A seperate legal entity. It is listed on the Australian Stock Exchange and requires a minimum of 5 shareholders to an unlimited number of shareholders. Anyone can buy a share of the business and can be traded freely.Has LTD(Limited) in its name. Required to publish an annual report that details the financial records and activities of the business

Vision Statement

A framework for a business’s strategic planning. It is aspirational, indicating the future acheivement, positive, easy to understand, and provides a clear image of the business’s purpose

Mission Statement

A plan of action for a business. It states the purpose and defines the culture,values and ethics of the business. It is more precise than the vision statement and inspirates internal stakeholders and present a clear message to external stakeholders

Goals

A statement of direction that identifies what a business wants to acheive. It provides clear direction of what business wants to acheive from the mission statement. They must be specific, measurable, attainable, realistic and timely

Strategies

How to reach a goal. The direction towards achieving a goal

Tactics

The actions taken to acheive the strategy. The action taken to support the strategy.

Objectives

A statement of intention that provides direction for acheiving a goal. It breaks down the goal and sets a journey towards achieving the goal.

Influence of stakeholders

Stakeholders can influence a business financially and operationally, affecting its decisions and outcomes. Businesses must balance profit with social and environmental responsibilities, while also meeting employee expectations such as fair pay and safe working conditions to avoid legal issues and low morale.

Internal Stakeholders

Individual or groups directly connected to a business’s core operations. The success or fail of the business directly affects them and their interests. Commonly owners, managers, employees. Owners are concerned with acheiving strong financial performance and maximising profit. Managers and employees focus on job security and receiving fair wages

External Stakeholders

Stakeholders outside of the business who are affected by its actions or outcomes. Commonly consumers, suppliers, investors, community, government. Consumers expect high-quality goods and services. Suppliers expect continous purchase from the business. Investors, community and government are impacted by the return from the business

Conflicting Stakeholders

Conflicts may occur when stakeholder interests differ. Therefore, businesses must balance these competing needs to operate effectively